India compliance-as-a-service for a US MSP setting up an offshore pod

Context

The client is a US-based managed service provider opening their first India-based offshore pod — planned at ten engineers in the first year, scaling further if the model worked. They had a clear roadmap for what the pod would do, but no internal capability to set up the entity, payroll or statutory compliance side of operating in India.

Challenge

Indian employer compliance is not what US payroll providers handle, and the list is longer than most international employers expect:

• Provident Fund (PF) contributions and monthly filings
• Employee State Insurance (ESI) where applicable
• Professional Tax — state-specific, with rates and registration that vary by city
• TDS on salaries — monthly deductions and quarterly returns
• GST on invoiced services
• Shops & Establishment registration — also state-specific
• Gratuity provisioning under the Payment of Gratuity Act
• Leave policy alignment with applicable state factory or shops law

Getting any one of these wrong tends to surface only when an audit or grievance escalates, by which point the cost to remediate is significant.

Approach

We onboarded the engineers under our existing Indian entity. The client kept full engineering ownership; we owned the employment-of-record stack:

• Compliant payroll processed monthly with statutory deductions handled at source
• All statutory returns filed on the appropriate cycle — monthly, quarterly, annual
• State-specific registrations handled in each city the pod was hiring in
• Monthly compliance dashboard delivered to HQ summarising filings, deductions, and any items requiring client attention

Outcome

The pod was operational six weeks from kickoff — the entity layer was not the bottleneck.

In the audits that followed in the subsequent statutory cycles, there were zero compliance findings against the pod's employment or tax position. The client has continued to add to the pod since.